Friday

Jun 28, 2013 at 9:45 PM

Health Insurance Commissioner Christopher F. Koller has approved 2014 premiums that he calls “significantly lower” than those requested –– but that still involve increases. Most Rhode Islanders, although...

Health Insurance Commissioner Christopher F. Koller has approved 2014 premiums that he calls “significantly lower” than those requested –– but that still involve increases.

Most Rhode Islanders, although not everyone, are likely to pay more for health insurance in 2014, but how much more will vary from one person to another.

For the majority of insured people who get health coverage from large employers, rates will go up, on average, 9.5 percent to 12 percent.

For small groups and individuals, the 2014 rates cannot be compared with current ones because the rules have changed under the Affordable Care Act, or Obamacare.

But all the insurers are projecting continuing growth in medical costs (from 4.5 percent to 7.6 percent), and also face 2 percent to 5 percent increases because of one-time fees associated with Obamacare.

In his final act as health insurance commissioner, Koller reviewed and approved the rates for 212 plans, checking for compliance with new standards under federal and state law.

Will Rhode Islanders face the “rate shock” predicted in other states?

Koller said that young, healthy people who buy insurance as individuals are most likely to see increases, because discounts for good health are no longer allowed. But because Rhode Island already has a highly regulated insurance market, any price fluctuations will be less dramatic than in some other states.

For everyone, Koller noted, the biggest driver of premium increases is medical costs –– both the prices paid to providers and the amount of services that members use. The growth in medical spending, he said, must be addressed by the state as a whole, with changes in the way care is provided and paid for, and consumer engagement.

Now, the Health Benefits Exchange, the marketplace where individuals and small groups will buy health insurance starting in 2014, must decide which of the 212 plans qualify to be sold on the exchange.

Asked whether the premiums Koller approved will be low enough to attract small businesses to the exchange, Ian Lang, exchange spokesman, said: “There are going to be affordable options on the exchange. We’re going to have options on the exchange to allow individuals and small businesses to pick the plan that fits their needs and can fit within their budget.”

The process for reviewing large-group plans has not changed, and as usual, Koller reduced the requested rates for all three insurers: Blue Cross & Blue Shield of Rhode Island, Tufts Health Plan and UnitedHealthcare of New England.

For large employers, Blue Cross asked for an average increase of 17 percent; Koller agreed to 12 percent, saying that Blue Cross did not need to spend as much as proposed on medical expenses, administration and taxes. Tufts wanted 10 percent and got 9.5 percent. United’s 13 percent proposal was slashed to 9.7 percent; Koller reduced administrative costs and contributions to reserves. These percentages are averages; groups will pay more or less depending on their demographic make-up and past use of services.

Neighborhood Health Plan of Rhode Island, which currently serves only Medicaid beneficiaries, is entering the commercial market for the first time, offering plans for individuals and small businesses. Neighborhood declined to comment on Koller’s decisions about its rates.

The other health insurers e-mailed statements when asked to comment. Blue Cross said it accepted Koller’s changes. “We understand that Rhode Islanders are struggling and cannot afford continuing significant rate increases. We remain committed to working with all stakeholders to address issues of cost,” Blue Cross’s statement said.

The statements from Tufts and United did not address Koller’s decision but both said they are doing all they can to keep costs down.

Koller left office Friday to take a job as president of the Milbank Foundation in New York City. He continues to hold the title of health insurance commissioner and remains available for emergency actions until a new commissioner is appointed. Governor Chafee has nominated Dr. Kathleen Hittner, a former hospital executive, for the post. Her appointment requires Senate approval.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.